The Charity Tax Group is asking government for an early review of the Gift Aid Small Donations Scheme and urging it to avoid "poorly targeted and often draconian" measures against the abuse of charity tax reliefs, in a submission before of the Autumn Statement.
The CTG has sent the briefing with its five requests to Priti Patel, the Treasury minister responsible for charity tax issues, and other Treasury officials, following a public call last month for individuals, businesses and charities to make their views known before the Chancellor makes the statement on 3 December.
The CTG submission says that although the GASDS scheme – which allows charities to claim Gift Aid-like relief on up to £5,000 of small cash donations each year without needing to supply individual paperwork – is welcome, take-up by charities has been poor.
The CTG says government should review the scheme in 2015, a year earlier than scheduled, and consider whether the requirement for a two-year history of regular Gift Aid claims is necessary, whether it is reasonable that the GASDS applies only to cash payments, and the way the scheme has been promoted.
The GASDS scheme’s slow start has also been of interest to the National Council for Voluntary Organisations, the Institute of Fundraising and the Charity Finance Group. After taking evidence from the sector over the summer, the three umbrella bodies last week published a briefing on the scheme asking for the review to begin now, calling for a relaxation of the rules and saying government should work with the sector to gather information on organisations currently claiming money under the scheme.
It also says that while the CTG "understands and shares the government’s concern about the potential abuse" of charitable tax reliefs, the government should avoid excessive measures to clamp down on abuse – as it did in dropping plans to introduce a new definition of charity for tax purposes.
The CTG says the government should avoid "introducing overlying and poorly targeted – and often draconian – legislative measures that unfairly disadvantage law-abiding charities" and also calls for changes to the "fit and proper persons" rules that govern who can be a charity trustee.
The other three asks made by the CTG are for reform of the Gift Aid declaration and rules relating to intermediaries, reform to the rules governing benefits provided by charities in return for donations, and improvements to the VAT regime for charities, including an extension of provisions allowing VAT rebates for charities providing emergency and search and rescue services.
John Hemming, chair of the CTG, said he had recently met Patel, who took up her post in July. He said: "I welcomed her commitment to listen to the sector’s concerns and to take action to improve the tax system for charities. I urge Treasury ministers to accept the proposals made in our submission; they will save charities time, money and stress.
"Simple changes, such as the removal of the Gift Aid history requirement for the small donations scheme, could really help to increase take-up by making access to the scheme far easier, and should be given serious consideration. Limited VAT refunds for emergency service charities could – literally – save lives."